DAX 30 Trades Lower on a Soft IFO Index
The DAX 30 (FXCM: GER30) is down by 1.11% at the time of writing. The decline is due to profit taking and also on traders adjusting their positions to this morning’s soft German IFO expectations index, which declined to 98.8 from 101.6.
Yesterday, German Manufacturing PMI slipped to 50.2 from 52.3 in January, a figure below 50 hints that the manufacturing sector is contracting. This is something which may become reality over the coming months due to the slowdown in 'New orders'.
The Markit PMI Manufacturing for the U.S. declined too, from 52.4 to 51, while Japan PMI declined to 50.2 from 52. This adds to a bearish case, but for now the DAX 30 trend is bullish and needs to be respected.
Short-Term Bullish Above Friday’s Low
The trend is short-term bullish above Friday’s low of 9320, and as long as price trades above this level, the DAX 30 may reach the February 4 high of 9623. On a break to this high the index may reach the February 1 high of 9797.
Trend-following traders who are not Long will probably using the current pullback to the 9470-9400 range to enter in line with the trend, as the risk/reward ratio for bullish positions is good here if the price reaches 9326 and 9797.
U.S. Consumer confidence, Richmond Fed and Existing Home Sales are on deck today, however I don’t think they will alter the overall trend of the DAX 30. See our economic calendar.
DAX 30 | FXCM: GER30
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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